Postal Savings Bank fined 500 million yuanBusiness | Samantha Wong and Reuters 2 Jan 2018
Postal Savings Bank of China (1658) said yesterday it received a decision on an administrative penalty of about 500 million yuan (HK$600 million) issued by China's banking regulator, over a breach of rules and management standards by the bank's investment in the Trust Scheme.
In October 2014, the bank made four investments of 2.2 billion yuan in aggregate for a term of three years in a single unit trust fund scheme, with subsidiaries of Guangdong Huizhou Qiao Xing Group as the parties raising funds and Shanghai International Trust as the scheme's trustee.
The Beijing Bureau of the China Banking Regulatory Commission said on Friday it has penalized 13 financial institutions for providing funds to China Guangfa Bank, imposing fines and confiscating illegal income totaling 1.34 billion yuan. The regulator has confiscated a total of 661 million yuan of illegal income and handed out fines totaling the same amount, according to a statement on the commission's website.
Guangfa Bank had provided illegal guarantees for corporate bonds issued by Chinese phone maker Cosun Group, and sought to conceal the extent of the bank's debts.
When the bonds defaulted in December 2016 the online platform on which they were sold called on the insurer of the bonds, to repay investors.